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Blindsided by Wynn's Departure, Foxwoods Investors Have
no Contingency Plan and are Exploring Options

By Jennifer Lin, Suzette Parmley, and Elisa Lala, The Philadelphia InquirerMcClatchy-Tribune Regional News

Apr. 10, 2010--Local investors in the Foxwoods Casino project said Friday they were "blindsided" by the abrupt decision of Las Vegas gaming tycoon Steve Wynn to pull out of a deal to build a South Philadelphia gambling hall.

Stephen A. Cozen, a lawyer for the Foxwoods group, said Wynn had given the investors "specific notification" for why he severed negotiations. Cozen would not disclose details but said that it "was nothing anybody would have ever anticipated."

"We feel very much victimized," Cozen said in an interview.

Cozen said the Foxwoods investors had dealt in good faith for the last six months to advance a plan to transfer control of the project to Wynn Resorts Ltd. of Las Vegas. He said the investors' group, the City of Philadelphia, and the Pennsylvania Gaming Control Board "have been taken advantage of" by Wynn.

A local spokeswoman for Wynn Resorts, Maureen Garrity, said, "We're not responding."

Some people familiar with the project said the relationship between Wynn and some of the main local investors was strained.

In 2006, the Foxwoods group won one of two licenses for a slots parlor in Philadelphia. The investors included 14 individuals and charitable trusts, and the Mashantucket Pequot tribe of Connecticut, which intended to build and operate a gaming hall on Columbus Boulevard in South Philadelphia.

From the start, the project faced opposition from City Council and neighbors, who feared congestion. The investors suggested in 2008 that the casino be moved off the waterfront to Center City, but were forced last summer to return to South Philadelphia.

Wynn began talking to the group about taking over the foundering project in October. He said he was attracted to Pennsylvania after the General Assembly approved adding table games to casinos in addition to slot machines.

After the deal's collapse, Cozen said the original Foxwoods group was "exploring our options."

The failure of the Wynn negotiations throws into question whether the Foxwoods investors will be able to hold on to their gaming license.

In January, the gaming board had threatened to revoke the project's license because of repeated delays and missed deadlines. The board will take up the matter of Foxwoods at its public meeting April 29.

In a letter Friday, State Rep. Michael O'Brien, a Democrat and casino opponent whose district borders the central Delaware waterfront, called on the gaming board to "initiate an immediate proceeding for the revocation of this license."

O'Brien told the board that the "viability of this license becomes dimmer by the day."

In the Pennsport section of South Philadelphia, opposite the vacant 18-acre Foxwoods site, Wynn's departure prompted mostly relief.

"I'm a union guy, but I wasn't for putting a casino in there," said Tom Otto, president of the Pennsport Civic Association. "We're not anti-casino, we're anti-location."

State Rep. William Keller, a South Philadelphia Democrat whose district includes the proposed Foxwoods site, said, "If someone of Steve Wynn's caliber couldn't do it, that says something."

Wynn's about-face still has people directly involved in the deal scratching their heads.

Some industry observers say this is typical of the veteran casino developer, who has been known to drop projects in midstream. In November, Wynn pulled out of bidding for a slots parlor at the Aqueduct Racetrack in New York City. Wynn Resorts had been considered a front-runner.

While Wynn and local investors agreed on the big picture, they got tripped up on the details, observers say. The deal "apparently blew apart between the operators," said Mayor Nutter, who met Wynn on Monday to discuss his project.

A trio of local entrepreneurs has been steering the faltering project for the last year, taking over from the financially strapped tribe.

They include Center City developer Ron Rubin, Comcast/Spectacor chairman Ed Snider, and New Jersey lawyer Lewis Katz. Rubin and Katz created charitable trusts to invest in the casino, while Snider planned on doing so.

Colleagues describe the three as successful entrepreneurs who are accustomed to leading, not following.

Another person familiar with the project said the three had a relationship that was "fragmented and strained," and "that had an impact on Wynn's decision."

Gov. Rendell, who counts Katz among his closest friends, said he had "no idea" why Wynn pulled out of the deal. "He didn't consult with me," Rendell said during a Center City fund-raising event Friday.

The collapse of the Foxwoods deal raises the obvious question of what is next for Wynn.

On Tuesday, he took a side trip to Atlantic City, triggering speculation that he wanted to return to the seaside gaming resort. Although Wynn was one of the first casino operators in Atlantic City, Wynn Resorts does not now have a property there.

Sources confirmed that Wynn had met with Revel chief executive Kevin DeSanctis on Tuesday after taking a short tour on his own of the partly built $2 billion Revel Casino on the Boardwalk.

According to those familiar with the visit, Wynn met with DeSanctis for about 45 minutes on what was described as "a social call."

Wynn Resorts spokeswoman Jennifer Dunn said Friday that the casino mogul "has no interest in Revel A.C."

Contact staff writer Jennifer Lin at 215-854-5659 or jlin@phillynews.com.

Inquirer staff writers Tom Infield and Miriam Hill contributed to this article.

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To see more of The Philadelphia Inquirer, or to subscribe to the newspaper, go to http://www.philly.com/inquirer.

Copyright (c) 2010, The Philadelphia Inquirer

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